What happened

The down-again, up-again roller-coaster ride that has been Intelsat (NYSE:I) over the past week or so took a sudden, jagged turn down again on Monday, with shares of the satellite communications stock closing off a staggering 40%.

You can blame Twitter for that -- and also the FCC.

On Monday, Federal Communications Commission Chairman Ajit Pai tweeted out his support for a movement in Congress to hold a public auction of C-Band spectrum, currently controlled by Intelsat and fellow satcoms Telesat and Loral Space & Communications.  

Glowing red stock arrow trending down.

Image source: Getty Images.

So what

Why is this significant to Intelsat?

Last week, Intelsat joined with its fellow members of the "C-Band Alliance" in offering to hold a private auction of the spectrum in question, then hand over a big chunk of the proceeds -- literally billions of dollars -- to the U.S. government. That would still leave several billions more for Intelsat -- money it would use to invest in new satellites and new compression technology to permit it to continue transmitting data from satellite to cable operators on Earth, and hopefully leave enough profit left over to start paying down its $14.8 billion debt load.

Instead, Pai is supporting a plan to hold "a public auction of 280 megahertz of the C-band ... while preserving availability of the upper 200 MHz of the band for continued delivery of programming" by the satcoms.

Now what

Intelsat and its peers don't like this idea, which could potentially delay the monetization of their spectrum assets by years.

In response to the chairman's tweet, the C-Band Alliance pointed out that "the announcement [does not] address the fundamental modification of the rights afforded by the existing FCC licenses held by the CBA members which would be required under a public auction approach." That sounds like the beginnings of a threat to sue the FCC for attempting to auction off to other licensees something that it has already licensed to Intelsat and its peers -- litigation that could, incidentally, delay the monetization of Intelsat's spectrum assets even further.

On Wall Street, at least two separate analysts cut their price targets on Intelsat today, and a third, Evercore ISI, actually downgraded the stock -- which tells you just how nervous everyone is now getting.